Question
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow: Direct Labor-Hours per Unit Annual Production Hubs 0.70 23,000 units Sprockets
Fogerty Company makes two productstitanium Hubs and Sprockets. Data regarding the two products follow:
| Direct Labor-Hours per Unit | Annual Production | ||
|---|---|---|---|
| Hubs | 0.70 | 23,000 | units |
| Sprockets | 0.30 | 45,000 | units |
Additional information about the company follows:
Hubs require $36 in direct materials per unit, and Sprockets require $20.
The direct labor wage rate is $20 per hour.
Hubs require special equipment and are more complex to manufacture than Sprockets.
The ABC system has the following activity cost pools:
| Activity Cost Pool (Activity Measure) | Estimated Overhead Cost | Activity | ||
|---|---|---|---|---|
| Hubs | Sprockets | Total | ||
| Machine setups (number of setups) | $ 22,230 | 130 | 104 | 234 |
| Special processing (machine-hours) | $ 147,000 | 4,900 | 0 | 4,900 |
| General factory (organization-sustaining) | $ 245,600 | NA | NA | NA |
Required:
2. Determine the unit product cost of each product according to the ABC system.
Complete this question by entering your answers in the tabs below. Determine the unit product cost of each product according to the ABC system. (Do not round intermediate calculations. Rounc your answers to 2 decimal places.)
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Managerial Accounting Tools for business decision making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
6th Edition
978-0470477144, 1118096894, 9781118214657, 470477148, 111821465X, 978-1118096895
